China Power Shortage
Hiring, retention and motivation are huge issues for HR departments in China but it seems that even the best collective efforts of Recruiters and Line Managers would be insufficient to overcome the current shortage of electric power.
Reports from various parts of China indicate that companies, both local and international, are being held back by a shortage of power in their area. If this lines up exactly with the skills shortage, such the the supply of labour is reduced by the skills shortages to the level of supplied power, then that its all to the good.
But such conjecture belongs in the world of idle fantasy. You cannot achieve balance with two negatives. If only things were so easy.
The reality is that some parts of China, especially in the South, are only able to receive electric power 3-4 hours per day. So no matter how few less hires the company makes they cannot make up for the fact that they have to hire the wrong people. They should be hiring part-time people when in fact they are still hiring full-time people. The hiring market in China is so strong it is very hard to get people to do part-time work. Electic power shortages are unpredictable and this makes workforce planning that bit more difficult.
A variety of different culprits have been identified. These have been variously; the white hot rate of economic (not new), delays in new plant opening (plannable), government efforts to close down old, polluting power plants (delayable) and a lack of fuel (bizarre).
(It¡¯s worth noting that it is currently ¡®Huang Meitian¡¯ in China, despite reports that it will start next Sunday, and the power situation can only get worse. Humidity rates are already above 80% and air-conditioning is prefererable 24 hours per day. Soon air-cons all over China will be left on permanently.)
Time to Re-Think?
The worst case scenario is that international companies begin to re-think their investments in China. Fortunately, and strange as this word may sound, the power shortage has been going on for many years. CEOs of multinational companies have already factored it into their investment plans. No one expects China to have the kind of electric power transmission system that exists in Germany or Australia.
But at the same time there are many other countries bidding for any given MNC¡¯s investment. FDI is fickle and can go into reverse very quickly if sentiment changes. India looms large on China¡¯s competitive world map.
Since around the year 2000 companies have shifted to a very ¡®lean¡¯ approach to their business, such that a delay in one part of the supply chain ripples quickly through to the other parts. A ripple from the Workshop of the World could mean a red tide for other places.
That¡¯s a risk most CEOs won¡¯t take.